Solar power will come at a price

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Last Updated: Sun, Jan 20, 2013 06:50 hrs

New Delhi, Jan 20 (IANS) The government is pushing power companies to start distributing a certain percentage of renewable energy, like solar power, from this financial year, but the discoms say they need more time and that solar power is likely to lead to higher power tariffs in the short run.

To ease pressure on the already exhausted conventional sources of energy, discoms in the capital have been asked to purchase or generate a certain amount of solar energy.

According to officials, as per rules all state electricity regulatory commissions (SERCs) have to ensure that all discoms draw a certain percentage of renewable energy, including solar energy.

But officials in the government and the discoms feel that power tariffs may go up in the near future if this is done.

According to India's National Tariff Policy of 2006, the SERCs are required to fix a minimum percentage of renewable purchase obligation (RPO) that is binding on the discoms. For 2012-13, the discoms will have to purchase 3.40 percent of power generated from renewable sources, of which 0.15 percent will be solar energy.

"The power companies will have to use a renewable source of energy for their consumption. Either they can generate it by installing a solar power plant or by purchasing," a Delhi government official told IANS.

Since installing a solar power plant in Delhi is difficult owing to scarcity of land, the companies will have the option of buying solar power through Renewable Energy Certificate (REC). The certificate is awarded to those who generate electricity from renewable sources such as wind, biomass, hydro and solar.

"Anyone generating power from renewable sources of energy can get REC from the solar nodal agency in the state," explained an official.

By purchasing RECs, discoms can fullfil their commitment under the RPO of buying environment-friendly energy, the official said. The share of renewable energy in the total power consumption of discoms will keep increasing every year.

As the government is keen that the use of environment-friendly energy should go up in the coming years, it has stipulated that by 2017, power discoms in the capital have to allocate nine percent of their electricity consumption to renewable energy.

Of this, 0.35 percent will be in the form of solar energy, the official said.

Power discoms, however, do not seem to be too keen on this environment-friendly initiative. "We are already under a lot of pressure. Buying or generating solar power is really costly. If the government wants us to install solar power plants, then land should be subsidised which does not seem to be the case," an official of a power distribution company told IANS.

The companies will need to install huge solar photovoltaic panels on large tracts of open land.

"Even if we buy the certificate, it will cost us a lot. We cannot rule out a hike in power tariffs in the coming years," the official said.

According to government officials, the generation of one MW of electricity from a solar power plant will cost Rs.10 crore.

A government official, speaking to IANS on the condition of anonymity, said: "People may have to bear the brunt of extra cost incurred by power discoms in harnessing green energy."

The capital has three power discoms - BSES Rajdhani Power Limited (BRPL), BSES Yamuna Power Limited (BYPL) and North Delhi Power Limited (NDPL). Power tarrifs were hiked by 26 percent in the capital last June.